Express Business Filler #1

TWO DAYS after S&P Global Ratings downgraded Republic Bank Ltd and First Citizens Bank, the regional credit rating agency, CariCRIS, reaffirmed the assigned the rating of Massy Holdings Ltd (Massy) and gave the local conglomerate a stable outlook.

CariCRIS yesterday assigned the issuer/corporate credit ratings of CariAA+ on its regional rating scale, and ttAA+ on the Trinidad and Tobago (T&T) national scale to Massy. These ratings, which both pertain to foreign and local currency ratings, indicate that the level of creditworthiness of Massy, adjudged in relation to other obligors in the Caribbean and within T&T, is high.

CariCRIS said: “Our stable outlook is based on our expectation that the group’s stable revenues and ongoing implementation of cost optimisation initiatives will continue to support profitable operations over the next 12 to 15 months, notwithstanding constraints faced in its main operating territories of T&T and Tobago and Barbados.

“We are, however, closely monitoring the impact of the coronavirus (COVID-19) on global and regional economies and financial markets, which, if continued for a prolonged period, can adversely affect revenue and the overall creditworthiness of all our rated entities.”

On March 20, the regional ratings agency placed all its ratings on Rating Watch – Developing. That was based on the widespread impact that the coronavirus (COVID-19) is having on global and regional economies and financial markets, which, if continued for a prolonged period, can adversely affect revenue, cashflows and the overall creditworthiness of all our rated entities.

CariCRIS said ratings are placed on Rating Watch when events occur that may affect the credit quality of the issuer/issue, the impact of which is either unclear or cannot be accurately assessed at this point in time. It said a rating placed under Rating Watch does not imply that the rating will necessarily change.

The rating agency said Massy’s ratings “reflected its moderate industry diversification and good market position which reduces the impact of severe economic downturns on the group’s performance.”

It said also supporting the ratings is the group’s portfolio of complementary businesses that promotes cross selling and value chain maximisation.

Furthermore, according to CariCRIS, the group’s strong cash flows and healthy debt protection metrics continue to drive its solid financial performance.

“These rating strengths are tempered by continued weak economic performance in T&T and Barbados which places downward pressure on the Group’s profitability, as well as restrictions to accessing US-dollar liquidity in T&T which continues to adversely impact business operations,” said CariCRIS.

Among the factors that may lead to an improvement in the ratings and /or outlook:

• An improvement in the CariCRIS credit rating of the GoRTT

Factors that may lead to a lowering of the ratings and /or outlook:

• Decline in operating cash flows of above 30 per cent leading to a deterioration in effective debt service coverage ratio (DSCR) to less than 1.2 times

• A lowering of CariCRIS’ sovereign credit risk rating of the GoRTT.

Massy is one of the largest conglomerates in the region comprising of over 60 companies with a presence in the automotive, industrial equipment, energy and industrial gases, retail, distribution, consumer finance, insurance, information technology and communication industries.


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